An investigation into the effectiveness of marketing strategies employed by Zimbabwean Insurance companies for creating competitive advantage.

Abstract

The Zimbabwean Insurance Industry has continued to see an increase in the number of players entering the market on one hand and a shrinking market at the back of an underperforming economy on the other hand. This has resulted in both old and new players in the insurance industry scrambling for the few clients who still see value in taking up life assurance policies especially after the losses that they suffered when the Zimbabwean economy adopted the multicurrency system. This challenge has been coupled with the influx of many new insurance companies that have joined the industry since the introduction of the multicurrency system. Competition in the industry has therefore been inadvertently on the increase over the years. It is against this background that the researchers sought to investigate into the various strategies that different players within the insurance industry have implemented in creating competitive advantage to attain improved organizational performance and sustainable growth. The objectives of this research were; to identify the different strategies that have been formulated and implemented by various organizations in the insurance industry in creating competitive advantage within the insurance industry; to measure the effectiveness of these strategies in creating competitive advantage; to identify the various challenges in the formulation and implementation of marketing strategies designed to create competitive advantage; an, to identify and recommend possible solutions to challenges faced in strategy implementation as organizations endeavour to continuously create competitive advantage. A cross sectional survey methodology was used to gather data from a sample of organizations within the insurance industry and two instruments were largely used for data gathering; the questionnaire and the depth interview guide. Results were analyzed and the following conclusions were drawn; organizations in the insurance industry largely use differentiation and low cost strategies, their products are intensely distributed using multiple agents and brokers, personal selling and advertising are also used as the main promotional strategies, and the use of human capital to create competitive advantage is becoming more extensively used by most organizations in the industry. It was on the basis of these conclusions that the researchers made the following recommendations; organizations in the insurance industry to regularly carry out comprehensive market researches to identify customers’ ever-changing needs in a dynamic environment, efforts have to be made to satisfy these identified customer needs if insurers are to effectively create competitive advantage, there is need to increase the level of giving customers value for money through enhanced product features and benefits, insurers can aggressively use ICTS to extensively promote their products to their various target markets, the use of physical evidence to create competitive advantage can be further explored and there is need for redefining organizational systems so that they become more robust in facilitating efficient service delivery. These recommendations are envisaged to significantly benefit players in the insurance industry, if they are to continuously create competitive advantage for superior performance and sustainable organizational growth.